KKR, Mubadala Backing New Logos Projects in Sydney and Melbourne

Logos has acquired an industrial site in suburban Sydney and another in Melbourne under the Australian developer’s partnership with private equity major KKR and Abu Dhabi’s Mubadala Investment Company.

The partners will develop the two properties into multi-unit logistics estates with a combined end value of A$640 million ($460 million), Sydney-based Logos said Wednesday in a release.

The plots consist of a 21.5 hectare (53.1 acre) greenfield site at Huntingwood in Sydney’s central west and a 7.8 hectare infill site in Reservoir, 13 kilometres (8 miles) north of the Melbourne CBD.

The announcement follows the Logos-KKR-Mubadala partnership’s acquisition last April of its seed project, an 18.2 hectare site in Brisbane’s Wacol area, where construction is underway on a master-planned estate worth more than A$200 million.

Serving a Growing Sydney

The acquisitions in Sydney and Melbourne, which boost the venture’s portfolio end value to A$900 million, align with the partnership’s investment strategy of acquiring and developing logistics assets which have stand-out value in an increasingly competitive industrial real estate market.

In Huntingwood, a primarily industrial suburb located west of Sydney, Logos has identified one of the biggest remaining industrial-zoned sites in New South Wales’ Central West with the capability of delivering a large-scale, prime-grade logistics estate.

“With strong connectivity to key transport infrastructure, the estate will be able to support the increasing demand from e-commerce, transport and logistics customers looking to service Western Sydney’s growing residential population,” said Darren Searle, head of Australia and New Zealand at Logos.

The Reservoir site, meanwhile, will benefit from its infill location, a flight to quality from local occupiers and speed to income through a timely and efficient development programme, said Myron Poobalasingam, Logos’s general manager for development in the state of Victoria.

Working With Friends

Now a unit of ESR after the Hong Kong-listed group’s acquisition last month of parent ARA Asset Management, Logos has 9.1 million square metres (nearly 98 million square feet) of property owned and under development, with a total completed value in excess of A$27.1 billion ($19.5 million).

The warehouse specialist reeled in private equity pioneer KKR for the Aussie venture around the same time that the Manhattan-based firm hired former Logos CEO Tom Lee as its new head of Australia and New Zealand real estate

KKR invests in the venture via its Asia Real Estate Partners strategy, the firm’s first dedicated vehicle for investing in Asia Pacific property, which reached a final $1.7 billion close in January 2021 with logistics playing a central role in the investment thesis.

Sovereign wealth fund Mubadala manages a $243 billion global portfolio spanning six continents and aimed at generating sustainable financial returns for the emirate of Abu Dhabi.

Formed by the 2017 merger of Mubadala Development Company and the International Petroleum Investment Company, the fund has invested in logistics funds managed by JD Property, the real estate management unit of China’s JD.com, as well as having been a key backer of Softbank’s Vision Fund.

Logos has long-standing relationships with the emirate’s sovereign investors. Last October, the developer’s 2014-vintage venture backed by the Abu Dhabi Investment Authority teamed up with local pension fund AustralianSuper to buy land near Sydney’s airport from Qantas Airways for A$802 million ($594 million), with plans to develop a four-level logistics centre on the site.